Please ensure Javascript is enabled for purposes of website accessibility

Law Digest — Maryland Court of Special Appeals — Jan. 17, 2019

Court of Special Appeals

Commercial Law, Four Cent Rule: The circuit court judgment correctly found that the “Four Cent Rule,” which was initially enacted in 1978 to address what was then perceived to be a serious problem involving the oversight and regulation of the marketing of gasoline and gasoline products to service stations throughout Maryland and which specifically exempts from its applicability “independent jobbers,” defined as individual persons or corporations that purchase motor oils from large oil refiners and resell them under the refiner brand name to service station operators, did not apply to the defendant company, which purchased oil from an oil refiner and in turn resold it to dealers such as the plaintiff service station operator, because the defendant company clearly qualified as an independent jobber. Azam v. Carroll Independent Fuel, LLC, No. 1793, Sept. Term, 2017.

Criminal Procedure, Jury instructions: Where jury sent judge a note during deliberations requesting clarification as to the crime charged against defendant, defendant’s conviction for human trafficking affirmed because circuit court judge did not err in responding verbally, as response was an accurate statement of the law. Joshua Isaiah Jones v. State of Maryland, No. 1942, Sept. Term 2017.

Commercial Law

Four Cent Rule

BOTTOM LINE: The circuit court judgment correctly found that the “Four Cent Rule,” which was initially enacted in 1978 to address what was then perceived to be a serious problem involving the oversight and regulation of the marketing of gasoline and gasoline products to service stations throughout Maryland and which specifically exempts from its applicability “independent jobbers,” defined as individual persons or corporations that purchase motor oils from large oil refiners and resell them under the refiner brand name to service station operators, did not apply to the defendant company, which purchased oil from an oil refiner and in turn resold it to dealers such as the plaintiff service station operator, because the defendant company clearly qualified as an independent jobber.

CASE: Azam v. Carroll Independent Fuel, LLC, No. 1793, Sept. Term, 2017 (filed Jan. 2, 2019) (Judges Nazarian, Leahy & MOYLAN (Senior Judge, Specially Assigned)).

FACTS: Khalid Azam owned a retail gasoline service station at 8207 Liberty Road in Baltimore County, doing business as “Liberty BP.” He was supplied with BP branded motor fuels for resale at his station by Carroll Independent Fuel, LLC (“CIF”). CIF purchased the motor fuels that it then resold to Liberty BP from BP Products North America, Inc. (“BP”), a major refiner of motor fuels and other petroleum products. CIF, as a middleman, sold motor fuels under the BP brand name to numerous service station operators, including Azam, for retail resale to motorists.

At some of these service stations, CIF itself owned the underlying real estate and leased the stations to the operators. CIF purchased the motor fuels from BP under a “Branded Jobber Contract.” Under such a contract, CIF was not authorized to use BP’s trademarks or to permit the service stations with which it dealt to do so without BP’s prior written approval and without strict adherence to the requirements and conditions set forth therein. The trademarks and other brand identifications were owned by “BP, PLC,” a corporation organized under the laws of the United Kingdom.

CIF sold BP branded motor fuels to Azam under a “Dealer Supply Agreement.” Pursuant to the agreement, Azam was authorized to use BP’s trade names, trademarks, service marks, logos, brand names, trade dress, design schemes, insignia, color schemes, and the like in connection with the advertising and sale of BP branded fuels at Liberty BP. CIF Under the Dealer Supply Agreement, CIF set the per gallon price for the BP branded motor fuel it sold to Azam.

On December 30, 2016, Azam filed a complaint against CIF in the circuit court, seeking a declaratory judgment and injunctive relief. Specifically, Azam sought a declaration that CIF was required to give Azam the benefit of the so-called “Four Cent Rule,” a rule initially enacted by the General Assembly in 1978 to address what was then perceived to be a serious problem involving the oversight and regulation of the marketing of gasoline and gasoline products to gasoline stations or service stations throughout Maryland. Since the legislative session of 1978, however, the larger problem that gave rise to the Four Cent Rule had, for independent reasons, all but disappeared, and as such, virtually no case law had developed regarding the rule.

Both parties filed motions for summary judgment. The circuit court judge denied Azam’s motion for summary judgment and granted CIF’s motion for summary judgment. Azam then appealed to the Court of Special Appeals, which affirmed the judgment of the circuit court.

LAW: In her decision, the circuit court judge held that CIF was an independent jobber and, as an independent jobber, was specifically exempt from the Four Cent Rule. Both parties agreed that there was no genuine issue as to any material fact and that summary disposition of the issues was, therefore, appropriate. The critical question, thus, was whether the circuit court judge’s interpretation of the pertinent statutes was correct as a matter of law.

The indisputable purpose of the Four Cent Rule was to eliminate (or at least to ameliorate) the imbalance or disparity between the independent retail dealers (the “uncontrolled outlets”) and the service stations owned or operated by the major oil companies (the “controlled outlets”). Distributors of gasoline had sold gasoline in the State through retail outlets operated by them at prices below or substantially the same as the wholesale price at which the same distributors sold gasoline to their retail dealers. Because of this pricing policy, retail dealers were unable to fairly compete with the retail outlets operated by the distributors.

The Four Cent Rule, codified in Maryland Code, Commercial Law Article, §11–304(l), states that a distributor who sets the retail price of gasoline through controlled outlets shall provide those noncontrolled outlets that it supplies with gasoline products at a wholesale price of at least four cents per gallon under the lowest price posted for each grade of gasoline at any controlled outlet. Violation of this subsection constitutes price discrimination as prohibited by §11–204(a)(3). The base figure from which the “four cents per gallon” is to be subtracted is “the lowest price posted for each grade of gasoline at any controlled outlet.”

The term “controlled outlet” is defined in §11–301(b) as an outlet which is operated by a distributor or operated by company employees, a subsidiary company, commissioned agent, or by any person who manages the outlet on a fee arrangement with the distributor. The companion sub-provision of the Four Cent Rule is §11–304(l)(2), which states that the provisions of this Act do not apply to independent jobbers and farm cooperatives. “Independent jobber” is defined in §11–301(h) as an individual or corporation who purchases gasohol or gasoline products from a wholesaler for resale to a dealer.

In essence, there exists a three-tiered relationship among the dealer, the jobber, and the refiner. See Chevron, U.S.A. v. Lesch, 319 Md. 25 (1990). This same relationship was present here, among Azam, CIF, and BP. It was undisputed that CIF purchased gasoline from BP Products North America, Inc. (the refiner) and in turn resold it to Azam (the dealer) for further sale to consumers. Thus, CIF clearly met the definition of “independent jobber.” See, e.g., Leh v. General Petroleum Corp., 382 U.S. 54, 61–62 (1965). And the statute creating the Four Cent Rule clearly exempted independent jobbers from the rule. In sum, because CIF inarguably qualified as an “independent jobber,” CIF was exempt from the Four Cent Rule.

Accordingly, the judgment of the circuit court was affirmed.

COMMENTARY: Although CIF’s exemption, as a jobber, from the Four Cent Rule was dispositive of Azam’s appeal, the circuit court judgment was likewise fully supported under an alternative and independent rationale. The core provision of the legislative regulations aiming to redress the perceived competitive imbalance in the marketing of petroleum products is the Gasohol and Gasoline Products Marketing Act of 1973. A critical component of that legislative policy is the “marketing act,” defined in §11–301(i) as an oral or written agreement between a distributor and a dealer under which the dealer is granted the right, for the purpose of engaging in the retail sale of gasohol or gasoline products supplied by the distributor, to use a trademark, trade name, service mark, or other identifying symbol or name owned by the distributor, or to occupy premises owned, leased, or controlled by the distributor.

Under the Branded Jobber Contract between CIF and BP, however, CIF was not authorized to use BP’s trademarks or to permit the service stations with which it deals to do so without BP’s prior written approval and without strict adherence to the requirements and conditions set forth therein; instead, the trademarks and other brand identifications were owned by BP. For this reason, as a matter o law, Azam could not establish that the Dealer Supply Agreement met the requirements necessary to constitute a “marketing agreement,” under §11–301(i). Since the parties’ Supply Agreement was not a “marketing agreement,” CIF was not required to comply with the Four Cent Rule established in §11–304(l)(1).

PRACTICE TIPS: Under the Four Cent Rule, “dealer” means a person engaged in the retail sale of gasohol or gasoline products under a marketing agreement, at least 30 percent of whose gross revenue is derived from the retail sale of gasoline products. “Dealer” does not include an employee of a distributor.

Criminal Procedure

Jury instructions

BOTTOM LINE: Where jury sent judge a note during deliberations requesting clarification as to the crime charged against defendant, defendant’s conviction for human trafficking affirmed because circuit court judge did not err in responding verbally, as response was an accurate statement of the law.

CASE: Joshua Isaiah Jones v. State of Maryland, No. 1942, Sept. Term 2017 (filed Jan. 4, 2019) (Judges Leahy, SHAW GETER & Kenney (Senior Judge, Specially Assigned)).

FACTS: On May 4, 2015, Prince George’s County Police Detective Antonio Hill searched the website Backpage in his capacity as an undercover detective and retrieved an advertisement that included photographs of a woman and a caption that read, in part: “Hello get a taste of Kandy…Out & Incalls.” Suspecting that the advertisement was for prostitution, the detective called the number provided and, posing as a prospective client, arranged to meet “Kandy” for a “date.” Detective Hill proceeded to the Comfort Inn in College Park accompanied by a team of officers and, when he arrived, Kandy advised him to come to Room 216. The detective entered the hotel room and after a brief negotiation, handed Kandy $200 in exchange for sexual acts. Under the pretext of using the bathroom, the detective opened the door for the arresting officers.

Kandy reported that she was a juvenile named “R.D.” and officers from the Maryland Child Exploitation Task Force took the lead in the investigation. The police obtained a copy of the room rental agreement from hotel staff, which indicated that Joshua Isaiah Jones had checked in that day and had reserved the room for one night. The police convened in the parking lot to wait for Jones, and when he arrived, he was apprehended.

Jones was charged by indictment with conspiracy to commit human trafficking, three counts of human trafficking of a minor, and receiving the earnings of a prostitute. At trial, the State alleged that Jones, acting as either a co-conspirator or an accomplice, coordinated with Rashid Mosby and Terra Perry to recruit R.D. to engage in prostitution.

According to R.D., she was in Jones’s one-bedroom apartment for two days. While she was at his house, Jones took her to two “outcalls” and she gave him $200 she received in exchange for intercourse. R.D. testified that she told Jones several times that she wanted to go home, and his response was that she owed him money. On May 4, 2016, Jones drove R.D. to the Comfort Inn and reserved her room, where she was discovered by police.

The State introduced data extracted from R.D.’s mobile phone using “Cellbrite” technology, including call logs, chat messages, emails, and contact information. A Cellbrite extraction report generated on May 4, 2015, reflected several telephone calls between Jones and R.D. on May 3, 2015 and May 4, 2015. The police also retrieved a message that stated: “If you want to go to Washington, he will bring you there. Okay. Text him now and tell him Caddy told you to call. Okay.” Within her contacts, the police identified a telephone number for Mosby that was assigned the contact name “BOSS,” while Jones’s telephone number was assigned the contact name “BO$$.”

During its deliberations, the jury sent out a note asking: “Please clarify what is meant by all of the elements of Human Trafficking-Minor.” Following a discussion with counsel, the trial judge replied with a note requesting the jury circle the confusing portion of the written jury instructions. A short time later, the jury submitted a copy of the instructions with the following section of Human Trafficking-Minor (MPJI-Cr 4:17:19) underlined: “the State must prove all of the elements of Human Trafficking.” The jury also underlined the following section of the Accomplice Liability Instruction (MPJI-Cr 6:00): “with the intent to make the crime happen, knowingly aided, counseled, commanded, or encouraged the commission of the crime, or communicated to a participant in the crime that he was ready, willing, and able to lend support, if needed[.]” The jury included a handwritten note in the margin asking “Does the state have to prove all of these elements.”

The trial court responded to the note by delivering the following instruction to the jury, in pertinent part: “Under the theory of accomplice liability, the State must prove, regarding the underlined portion where it says, with the intent to make the crime happen, comma, knowingly aided, comma, counseled, comma, commanded, comma, or encouraged the commission of the crime, the State must be able to prove one of these phrases….  And the last part, or encouraged the commission of the crime, again, with the intent to make the crime happen, the State must prove that one of these actions took place. Not all, but one of these actions.

Jones was convicted of three counts of human trafficking of a minor and one count of receiving the earnings of a prostitute. The court sentenced him to twenty-five years’ imprisonment, with all but seven years suspended for one count of human trafficking; a consecutive ten-year suspended sentence for receiving the earnings of a prostitute; and five years’ supervised probation. The remaining human trafficking convictions merged for purposes of sentencing.

Jones appealed to the Court of Special Appeals, which affirmed. 

LAW: Jones contended that the trial court abused its discretion by giving a “verbal explanation” of the pattern instruction in response to a question posed by the jury during deliberations.

Maryland Rule 4-325(a) requires that the trial court instruct the jury at the close of the evidence and permits the court to supplement the instructions at a later time, “when appropriate.” The decision of whether to provide a supplemental instruction, including an instruction given in response to a question from the jury, is within the discretion of the trial court and will not be disturbed on appeal absent a clear abuse of discretion. Appraicio v. State, 431 Md. 42, 51 (2013); accord Sidbury v. State, 414 Md. 180, 186 (2010) (“[W]hether to give supplemental instructions is within the sound discretion of the trial judge and will not be disturbed on appeal absent a clear abuse of discretion.”). As the Court of Appeals explained in Appraicio, “trial courts have a duty to answer, as directly as possible, the questions posed by jurors.” 431 Md. at 53. The trial court’s clarifying instruction “should not be ‘ambiguous, misleading, or confusing.’” Davis v. Armacost, 234 Md. App. 71, 96 (2017) (quoting Battle v. State, 287 Md. 675, 685 (1980), cert. granted, 456 Md. 521 (2017)). Furthermore, a trial court’s supplemental instructions must be an accurate statement of the law. State v. Bircher, 446 Md. 458, 463–64 (2016), cert. denied, 137 S. Ct. 145 (2016).

Jones, citing Ruffin v. State, 394 Md. 355 (2006), asserted that trial courts should be constrained from providing any supplemental instruction that does not refer the jury back to the pattern instructions. In Ruffin, however, the Court of Appeals clearly specified that the requirement that trial courts “closely adhere” to the pattern instructions was limited to instructing jurors on the presumption of innocence and reasonable doubt. Id. at 373. There is no authority that limits the discretion of the trial court to provide a supplemental instruction like the one given here.

Despite the claim that the pattern instructions were “clear,” the jury submitted a question evincing confusion and asked the court to clarify whether the State was required to prove every element in the accomplice liability instruction in order for the jury to find Jones guilty as an accomplice to human trafficking. There was no support for the claim that the supplemental instruction was incorrect or somehow misled the jury. Rather, the trial court’s instruction was an accurate statement of the law and a near verbatim recitation of the written pattern instructions. Therefore, there was no merit to the claim that the trial court’s supplemental instruction was an abuse of discretion.

Accordingly, the judgment of the circuit court was affirmed.

COMMENTARY: Jones also contended that the evidence was insufficient to sustain his convictions for human trafficking of a minor under Maryland Code, Section 11-303 of the Criminal Law Article (“C.L.”) and receiving the earnings of a prostitute under C.L. §11-304. Specifically, Jones argued that R.D.’s account was “largely uncorroborated” and that her testimony was contradicted by evidence that he did not live in the house that she described.

A challenge to the sufficiency of the evidence is reviewed to determine “‘whether after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Grimm v. State, 447 Md. 482, 494–95 (2016). “Because the fact-finder possesses the unique opportunity to view the evidence and to observe first-hand the demeanor and to assess the credibility of witnesses during their live testimony, we do not re-weigh the credibility of witnesses or attempt to resolve any conflicts in the evidence.” Smith v. State, 415 Md. 174, 185 (2010). Rather, the Court defers to any reasonable inferences a jury could have drawn from the evidence in reaching its verdict and determine whether there is sufficient evidence to support those inferences. State v. Mayers, 417 Md. 449, 466 (2010). Accordingly, the sole concern of the appellate court is “‘whether the verdict was supported by sufficient evidence, direct or circumstantial, which could fairly convince a trier of fact of the defendant’s guilt of the offenses charged beyond a reasonable doubt.’” State v. Manion, 442 Md. 419, 431 (2015). Importantly, “it is not the function or duty of the appellate court to undertake a review of the record that would amount to, in essence, a retrial of the case.” Mayers, 417 Md. at 466.

Here, the State presented evidence that R.D. identified Jones by the alias “Caddy” when he was arrested, as well as in court. R.D. testified that Jones drove her to two residences where she engaged in prostitution and he took the money she had received in exchange for sexual activity. R.D.’s testimony was corroborated by the Cellbrite report, which indicated that the telephone number that Jones provided to police was consistent with the number saved in R.D.’s contacts as “BO$$.” R.D.’s testimony that Jones would not allow her to go home because she owed him money was consistent with expert testimony describing debt bondage. Finally, records from the Comfort Inn reflected that Jones rented the room where Detective Hill met R.D. and agreed to pay her a specific sum of money in exchange for sexual acts.

Based upon the verdicts in this case, it was apparent that the jury did not credit Jones’s testimony. It was concluded, therefore, that the evidence was sufficient to sustain Jones’s convictions for human trafficking of a minor and receiving the earnings of a prostitute beyond a reasonable doubt.

PRACTICE TIPS: The rule of lenity is a common law doctrine that directs courts to construe ambiguous criminal statutes in favor of criminal defendants and provides that two statutory offenses may not be separately punished if the Legislature intended for them to be punished in one sentence. Alexis v. State, 437 Md. 457, 484–85 (2014). Evaluation of a claim for lenity requires review of whether the charges arose out of the same act or transaction, then to whether the crimes charged are the same offense, and then, if the offenses are separate, to whether the Legislature intended multiple punishments for conduct arising out of a single act or transaction which violates two or more statutes. Clark v. State, 218 Md. App. 230, 255 (2014).